Charity banking: trustee control comes before convenience

A charity bank account must protect charitable funds while remaining practical for staff and trustees to operate. The key difference from ordinary business banking is governance: trustees retain responsibility for the money even where day-to-day banking is delegated.

Hold banking in the charity's own name and keep the account list complete

The Charity Commission's current internal-controls guidance says a charity should have a bank or building society account in the charity's name and that the account name should match the charity's governing document. Charity funds should not be routed through an individual's private account simply because opening or maintaining the charity account is inconvenient.

Maintain a central list of every current, deposit and other bank account. Include account purpose, provider, authorised users and last review date. This prevents old accounts being forgotten after trustee changes, grant projects or local fundraising activity ends.

Keep the trustee body informed about who can operate the accounts

The Charity Commission says opening or closing accounts should be authorised by the full trustee body or delegated to a group that informs the trustees. Bank mandates should clearly record who is authorised, and trustees should review them periodically so former trustees and staff do not retain power after their role ends.

Do not let one long-serving administrator become the only person who understands the banking. Maintain enough documented access that the charity can continue operating if a treasurer becomes ill or steps down. Delegation is sensible, but the trustees remain responsible for supervision.

Use dual authorisation and split duties around higher-risk actions

The Charity Commission recommends splitting duties so one person cannot control charity funds exclusively and requires proper approval for bank transfers and payments. Its guidance also recommends dual authorisation for internet banking and changes to bank mandates.

Make the rule practical. A small charity might allow routine low-value purchases within an approved budget while requiring two authorised people for bank transfers above a threshold, new beneficiaries or changes to payment details. The second approval should involve real review, not simply a second click by someone who assumes the first person already checked everything.

Reconcile every bank account at least monthly and have someone else review it

Charity Commission guidance recommends monthly bank reconciliations for all accounts, with a second person reviewing the reconciliation and discrepancies being resolved. This control catches posting errors, duplicated entries, forgotten standing orders and unauthorised activity while the transaction history is still fresh.

Use the reconciliation to connect bank transactions to invoices, receipts, grant restrictions and fundraising records. Where the charity handles cash, compare paying-in records with bank credits. A reconciliation is not complete because the balances happen to match. It should also establish that the transactions belong to the charity and were properly authorised.

Review dormant accounts, bank charges, interest and cash concentration

The Charity Commission advises charities to close accounts that are no longer used and regularly review the cost and benefit of current and deposit accounts. An old project account can become both an administrative weakness and a fraud risk if nobody watches it.

Review reserve cash as well. If the charity holds large balances, understand the authorised banking entity and FSCS position, and avoid concentrating funds blindly across brands that share a licence. Restricted funds should remain identifiable in the accounting records even if the bank does not provide a separate account for every restricted purpose.

Prepare for account-opening delays, service failures and complaints

The Charity Commission published dedicated charity-banking guidance in 2024 because many charities reported difficulty obtaining adequate banking services. It says charities should make their best efforts to set up a bank or building society account and points trustees to sector-specific guidance when banks request information.

Keep Charity Commission registration details, trustee information and governing documents current so the bank can verify the organisation. If service problems arise, document the timeline and complaint in the same structured way as any other banking dispute. Operational resilience is especially important where grant payments, payroll or beneficiary services depend on one account.

Small charities should resist solving access problems by letting donations flow through a trustee's personal account. That makes ownership, reconciliation and safeguarding much harder to evidence. If opening a suitable account is delayed, document the steps being taken and use the Charity Commission's banking guidance to understand available support rather than creating an informal banking arrangement that weakens trustee oversight.